CAA was formed to revamp, direct and regulate the dilapidated air transport industry. Air transport in Uganda had witnessed unprecedented decline due to a number of factors.
The collapse of the vital industry led to the fall in import/export volumes, isolation of the country by especially international tourists and a general drop in the national economy, partially attributed to poor and inefficient transport links with the outside world.
As a landlocked country, there was urgent need to review the macro-economic policy. This was made possible by the advent of the National Resistance government in 1986.